Corporations Begin `Just in Time' Hiring

ByDavid R. FrancisMay 6, 1994

MANY have heard of just-in-time inventory management. During the 1980s, hundreds of companies in the United States adopted this technique. Parts arrive at an assembly plant just before needed, minimizing inventory costs.

Something similar is happening in the workplace, says Rick Cobb, a vice president in Chicago of Challenger, Gray &amp; Christmas Inc., an outplacement firm. Employers, trying to keep costs under control, are hiring people for a specific task of limited duration at the eleventh hour. They might work on a data processing project for a year or two, get paid relatively well under a contract, but receive no benefits.

``It is a hired-gun, free-agent approach to the marketplace,'' he says. ``Lifetime employment is really a myth. Starting in the mail room and finishing with a gold watch is pretty much gone.''

But this practice is increasing in the white-collar area, Mr. Cobb says. Major corporations have been downsizing for some years, seeking greater flexibility, adaptability, and efficiency to compete with middle- or small-size companies.

Layers of middle management are let go; the rank and file is thinned. Cobb says 45 percent of those in today's work force have been laid off at least once in their lifetime. In this year's first quarter, employers announced an average of 3,106 layoffs a day. As a result, corporate loyalty is fading, particularly among younger workers.

``Employees are becoming function-loyal rather than company-loyal,'' Cobb says. They are loyal to their profession or skill, leaving a company with little compunction for better pay or more challenge at another firm. There they must learn the ropes quickly to make a contribution, before moving on again.

``Security is out,'' notes C. Randall Powell, director of placement at the Indiana University School of Business. ``The only security is your own ability.''

Cobb suspects the ``reengineering'' trend within the Fortune 1000 large industrial companies is a one-time event. ``I don't know whether it is good or bad,'' he says. ``It is an evolution.''

``How much is [management] fad and how much is considered decision - I don't think we will know this for a while,'' says Frank Levy, an economist at the Massachusetts Institute of Technology.

As he sees it, many companies have been forced to restructure by changes in the economy. In the first half of the 1980s, the major recession, in combination with a rising value in the US dollar, hit manufacturing particularly hard. The domestic slump in demand came together with greater difficulty in exporting products and severe competition from cheaper imports. In the later 1980s, service companies, such as airlines and the telephone companies, faced deregulation and new competition.

In this decade, demographics have weakened growth in both the labor force and the market for services and goods. The baby-boom generation has already entered the work force. And the proportion of women with paid jobs has leveled off after rising for many years.

Management experts debate whether large companies will benefit, in the long term, from their efforts to meet such challenges with massive, sudden layoffs. But the payroll shrinkage can bolster balance sheets in the short term.

Often the layoff decisions are made by the wrong people, Cobb says. Both those let go and the survivors can be badly shaken up by the event. Survivors are often expected to fill in for those employees who have left. Sometimes they can work ``smarter'' to get the job done; often they put in long hours.

But placement officers such as Indiana University's Mr. Powell note a return of corporate recruiters to campus. ``Many companies have downsized to the point where they're now crying uncle,'' Powell notes. He, too, talks of ``just-in-time recruiting'' as companies hold back until they are positive they have to hire someone to meet increased demand.

With the recovery gathering speed and perhaps because of corporate efficiency efforts, productivity in industry has picked up in recent quarters. Whether Americans with longer work hours are enjoying this new prosperity more is another question.